The WACC of Far East Orchard Ltd (O10.SI) is 6.2%.
Range | Selected | |
Cost of equity | 5.2% - 8.5% | 6.85% |
Tax rate | 17.0% - 27.6% | 22.3% |
Cost of debt | 4.0% - 11.2% | 7.6% |
WACC | 4.0% - 8.3% | 6.2% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.49 | 0.79 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.2% | 8.5% |
Tax rate | 17.0% | 27.6% |
Debt/Equity ratio | 1.66 | 1.66 |
Cost of debt | 4.0% | 11.2% |
After-tax WACC | 4.0% | 8.3% |
Selected WACC | 6.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
O10.SI | Far East Orchard Ltd | 1.66 | 0.15 | 0.06 |
5JK.SI | Hiap Hoe Ltd | 3.05 | -0.08 | -0.02 |
5RA.SI | Asia-Pacific Strategic Investments Ltd | 0.07 | 0.84 | 0.79 |
600555.SS | Hna Innovation Co Ltd | 0.51 | 0.95 | 0.67 |
BDX.SI | GSH Corporation Ltd | 1.54 | 0.25 | 0.11 |
C09.SI | City Developments Ltd | 2.85 | -0.13 | -0.04 |
CHHB.KL | Country Heights Holdings Bhd | 0.69 | 0.86 | 0.55 |
F1E.SI | Low Keng Huat (Singapore) Ltd | 1.76 | 0.27 | 0.11 |
F31.SI | Fragrance Group Ltd | 2.1 | 0.25 | 0.09 |
OU8.SI | Centurion Corporation Ltd | 0.55 | 0.92 | 0.63 |
Low | High | |
Unlevered beta | 0.1 | 0.29 |
Relevered beta | 0.24 | 0.69 |
Adjusted relevered beta | 0.49 | 0.79 |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for O10.SI:
cost_of_equity (6.85%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.49) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.